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US Economy in Bad Shape, Crude Oil Drops

Crude oil fell as the economic reports showed the US economic recovery stalled. The US gross domestic product grew 1.8 percent in the first quarter of this year, while traders anticipated a 2.2 percent growth. The jobless claims posted an increase from 414,000 to 424,000 instead of expected drop to 403,000.

Oil tends to gain while economy improves as growing economy means rising demand. Conversely, slowing economy erases demand. Therefore, the problems in Europe and the US macroeconomic data are negative for crude, showing that the global economy isn’t as healthy, as it was thought.

July contract for crude oil delivery fell $0.15 to $100.08 per barrel in electronic trading on NYMEX. July futures for Brent crude oil gained $0.12 (0.1 percent) to $115.05 per barrel yesterday on ICE.
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